FHFA Proposes Changes to Housing Goals
The Federal Housing Finance Agency (FHFA) recently released for comment proposed changes to its existing housing goals and housing goals for 2012, 2013, and 2014 for Fannie Mae and Freddie Mac. According to the FHFA, the value of low-income housing tax credits (LIHTCs) fell in 2009 but has recovered to a point where the LIHTC market is substantially healthier. The Office of Management and Budget forecasts that total equity raised through LIHTCs is to average $7.8 billion per year from the 2013 to 2017 period.
This amount is well above the estimated equity of $4.5 billion raised in 2009. In 2007, before the mortgage crisis, around $9 billion in equity was raised through LIHTCs. FHFA predicts that demand for LIHTCs should continue in strong rental markets. And as LIHTC investments return to pre-2008 volumes, opportunities for the Fannie Mae and Freddie Mac to finance LIHTC properties will increase and, therefore, goals-eligible units should increase.